Confusion Reigns Over NYAG DeFi Clampdown

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  • Nexo and Celsius have been forced to deny that they received cease-and-desist letters from the NYAG
  • The Attorney General sent letters to five DeFi companies, demanding information from three and that two stop serving New York
  • The cease-and-desist letters were named “Celsius Letter” and “Nexo Letter”

The decision by New York Attorney General (NYAG) Laetitia Adams to crack down on DeFi platforms serving the state has caused confusion after two such platforms were forced to deny that they had been on the receiving end of cease-and-desist letters. Lending platforms Celsius and Nexo explained that they were one of the three platforms that had been asked for information on their activities rather than being one of the two targeted for closure following confusion over the naming of two files on the NYAG system.

NYAG Targeted Alleged Martin Act Breaches

The NYAG announced on Monday that five DeFi lending platforms that had allegedly violated the Martin act had been targeted, with three asked for more information on their activities and two sent letters telling them to cease offering their services to New York residents. Those required to send in the information have until November 1 to comply, while those told to stop their activities have until October 28 to comply.

Celsius and Nexo Deny Receiving Cease-and-Desist Letters

Celsius and Nexo were identified when the NYAG press release was accompanied by the two redacted cease-and-desist letters. However, the NYAG office had called the files “Celsius Letter” and “Nexo Letter”, implying that these were the two platforms facing closure. This forced the two platforms to state that they weren’t the targets of the cease-and-desist letters:


Celsius has received a request for information (and not a cease and desist) from NY authorities. We are now working on providing regulators in New York with information about our business and offering.


Nexo is not offering its Earn Product and Exchange in New York, so it makes little sense to be receiving a cease-and-desist order for something we are not offering in New York anyway. The allegation of operating an unregistered business in New York appears to be a case of mixing up the recipients of the letter.

Celsius is already being investigated by regulators in New Jersey, Alabama, and Texas so it’s probably a relief to them that New York merely wants more information. While the two companies told to stop operating in New York have not yet been identified, it is only a matter of time before this happens.